A Bear Trap pertains to the technique played by a group of traders whose aim is manipulating the price of a digital asset. It is done through the outright sell of a great amount of the same crypto within the same given time. This, in turn, fools the market in such a way that it would suppose that there is an impending price decline.
Because of this, other traders resort to selling their assets. This results into driving the price down further. Traders who set the trap and then release it, buy their assets again for a lower price. Apparently, the price would rebound, thus allowing for the parties to garner profit. Participants of a market usually rely on technical patterns for the analysis of market trends and to evaluate investment strategies. Technical traders are able to identify and effectively avoid such through a range of analytical tools including Fibonacci retracement, relative strength oscillators, and volume indicators.